When you expand your business internationally, you open doors to exciting opportunities. However, working with overseas suppliers or clients can also bring unique legal challenges, particularly if a dispute arises. Understanding how to protect your business before problems occur can save you significant time, money and stress. This article covers the key legal considerations UK businesses should be aware of when working with overseas suppliers and clients, including how to structure contracts and resolve disputes.<\/p>\n\n\n\n
As a business entering into contracts with overseas parties, you need to address three fundamental questions: <\/p>\n\n\n\n
The way your contract is interpreted and applied will depend on which country’s legal rules your contract falls under. This is referred to as the governing law clause. Once this is determined, the jurisdiction clause will then decide which country’s courts will hear any dispute. While these are technically separate concepts, your lawyers will typically align them to avoid unnecessary complexity and cost. For example, if you choose English law, you will usually also choose English courts or London arbitration.<\/p>\n\n\n\n
The dispute resolution method<\/a> determines whether you will use:<\/p>\n\n\n\n You should always specify these elements clearly in your contracts. If you do not, you may find yourself facing these issues in addition to the actual dispute. This is because when a contract fails to specify this information clearly, courts in different countries are faced with complex rules for determining which law should apply and where the case should be heard. This uncertainty can create great risk and expense.<\/p>\n\n\n\n Winning your court case is only half of the battle. You then need to enforce that judgment<\/a>, and this is where cross-border disputes become particularly tricky.<\/p>\n\n\n\n As a UK business, you must be aware that Brexit has significantly changed the enforcement landscape. Previously, under the Brussels Regulation, you could enforce English court judgments across the EU member states with relative ease. However, the law no longer recognises those judgments automatically.<\/p>\n\n\n\n Today, you would need to check whether the UK has an enforcement treaty with the country of the overseas party if you obtain a judgment from an English court against them. This process was created post-Brexit once the UK rejoined an international treaty tailored to help with court judgements in other member countries, such as the EU. While this makes it simpler to use a UK court judgement in countries covered by the convention, it does not cover as many situations or countries as before. Legal risks, therefore, remain higher than pre-Brexit, particularly in countries outside the EU.<\/p>\n\n\n\n In many countries, you will need to start fresh proceedings to enforce your English judgment. This means additional legal costs, delays and uncertainty. Some countries may refuse to enforce your judgment altogether or may re-examine the merits of your case.<\/p>\n\n\n\n You should factor these enforcement challenges into your risk assessment when contracting with overseas parties.<\/p>\n<\/div>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n\n
The Challenge of Enforcing Judgments<\/h2>\n\n\n\n